Saturday, 16 May 2009

Shellshock

The one thing I can put into the public domain today, as I've been carrying them around in my handbag since Friday, are the figures for my expnses in the 2008-09 financial year, which aren't part of the current revelations/ publication. I don't have a detailed breakdown or any forms or receipts, just the summary.

The Incidental Expenses Provision (commonly known as the office costs allowance) and the Staffing Allowance are transferable, so, as has been my practice in previous years any money not spent under the IEP I will transfer to the staffing allowance - and if there's a little bit of money left over at the end of the financial year, I will pay it to them as an end-of-year bonus, to compensate for working long hours, for not a great wage and for putting up with me. We're talking hundreds, not thousands by the way. (Athough a bonus of up to 15% of salary is permissible under the rules). All this is by way of explaining that give or take a few pennies and a few bills left to settle I have spent my IEP and my staffing allowances for the 2008-9 year in full.

So - the figures are:

Office costs - £19,985
Staffing - £102,413
Communications - £9,056.68 (out of max. £10,400 allowance, i.e. 87%)
ACA (second home) - £16,961 (out of possible £24,000, i.e. 70.65%)

My ACA claim is relatively low for several reasons. One is because once you've bought the sofa and bed and TV and blinds/ curtains and a few bits and pieces, there's no need to spend any more on such items. Second, I've claimed much less for food, for reasons I've explained in a previous post. And most significantly, interest rates have gone down. And this is an issue for everyone who says that MPs should not be allowed to buy their second home with taxpayer help, but should only be allowed to rent. It's actually much cheaper for the taxpayer if an MP buys, at the moment.

At the moment on a £200k tracker mortgage someone would be paying c.£600 per month capital and £350 or so per month interest, MPs are not allowed to claim for the capital repayments, only the interest. Even a few years ago, the interest on such a mortgage would only be have been around the £1000-£1100 mark. If you try searching for a flat to let in SW1 or SE1, i.e. within a mile or so of Westminster, you'd be hard pushed to find even a studio for much less than £1000pm. So, perversely, allowing an MP to buy rather than rent is - unless interest rates go back to 1980s levels - cheaper for the taxpayer.

The next issue that raises its ugly head is whether MPs should be allowed to keep any profit made when they sell a flat which they've purchased with taxpayers' assistance. Let's leave aside for the moment the question of whether the taxpayer has paid for the sort of improvements and extensions and refurbuishments that would significantly add to a property's value.... I don't think that should be allowed and I don't think it's going to be allowed from now on. (For the record the only thing I've claimed on expenses that might perhaps fall into that category is an alarm system and better locks, but after being burgled twice in one month, and neighbouring flats being broken into while people were actually at home, I thought that was fairly reasonable).

Anyway, let's assume for the sake of argument that there are no fripperies, no porticos being added, no moats being dug. The property still has Artex ceilings, a lawn full of moles and a chimney choked with wisteria. If someone is paying the capital element on a £200k mortgage over 20 years they'd be paying about £7000 a year out of their own salary. So when the property's sold, should they have to, as some are suggesting, handing over all the profit to the Fees office? And then there's the question of what happens if the property is sold at a loss... would the Fees office stump up for that too?

Anyway, that's enough from me. Thought I should do my bit to keep the debate going. Have a listen if you have a moment to the last podcast from Tom Harris and Jamie Reed on Tom's site. I think you can tell from their voices (and they're usually both quite chirpy souls) just how shell-shocked some MPs are by all this. It's been grim, relentlessly grim. And no doubt we have more joys to look forward to in tomorrow's press...

13 comments:

Dick the Prick said...

I think a wage augmentation is called for. That was the problem with messing with the House of Lords - those guys did it for the gig and lunch.

Bristol Dave said...

Out of interest Kerry, what does the communications allowance pay for? (I'm talking all MPs here, not just you)

Is it (as I'd imagine) stamps and phone/internet bills or is it used for telling your constituents what a great job you're doing (e.g. with pamphlets through letterboxes) as Cameron implied in a recent PMQs where he called for it to be scrapped?

Hopi Sen said...

Kerry, I generally agree with you (and by the way, I think you've handled this whole thing very well - so take some comfort in that, as others could learn from your approach.


On the Capital gain question I think there ahs to be some way of working out relative levels of contribution (and in the current environment - risk).

Say an MP buys a property on an interest only mortgage, waits five years, then sells it. Since ACA would meet all of that, it's hard to justify them recieving any capital gain. By the same token they might not be liable for any losses.

Say they have also spent 10k of their own money on improvements, and paid down the capital. Clearly therefore they have made some contribution from their own finances, and should have the right to get a proportion of that gain.

Of course, working out the relative contributions- interest, capital and repair would be very tedious, but I think something like that is the only way forward.

Glenn Vowles said...

The expenses controversy reveals no formal mechanism for getting rid of MPs between elections.

Kerry do you favour bringing in legislation to enable petitioning for the recall of MPs (and any other elected representatives), under a proper set of rules for the process, adding to accountability.

Surely if enough constituents want MPs/Councillors etc to be recalled between elections then, in a democracy that should happen.

If I'm elected as the Councillor for Eastville this June I'd be happy for such legisaltion to apply to me. Would you be happy for it to apply to you??

Kerry said...

Comms Allowance covers newsletters (printing and distribution), mass mailings on specific local issues, website, etc. It's not allowed to be used for anything party political, which extends to not even being able to use the word Labour on a leaflet. It doesn't include normal parliamentary postage, e.g. for handling casework, or the envelopes, paper, etc associated with that. HOWEVER - when the Comms Allowance was introduced, a limit was placed on how much Commons stationery people could have. Some MPs managed to get through £20-£30k of the free supply of pre-paid envelopes in a year. These can't be used for unsolicited mailings but if a constituent has contacted you previously, you can then use the pre-paid stuff to keep them updated - so, for example, an MP who was around when the fox-hunting ban was under consideration, or something else that attracted big postcard campaigns, would then be free to write out to all those people regularly about animal welfare issues, using HoC stationery. When the Comms Allowance was introduced, as a trade-off a cap of £7k per year was imposed on the HoC stationery. If you want to send out any more mailings you have to buy stamps and envelopes from the Comms Allowance.

Phone and internet bills come out of the IEP (office costs) allowance. Parliamentary reports, website costs, etc, also used to come out of that allowance.

As for what Cameron said at PMQs - he's right that Comms Allowance is about telling constituents what they've been doing (I was about to say 'what they've been up to', but perhaps that's not the case!) It's always portrayed by him as being something only available to Labour MPs, and used as justification for why Tory candidates need the Ashcroft money, to keep up. They also say that Labour MPs have staff
and offices, so that justifies even more Ashcroft money for PPCs. Given the polls there aren't many Tory MPs worried about the marginality of their seats at the moment - so it's incumbent Labour (and Lib Dems) versus Tory candidates, by and large. But contrary to the impression you might have, Tory MPs get - and spend - the Comms Allowance too!

Probably a subject for another post, but apart from MPs telling their constituents what a wonderful job they're doing, I do think it's important for MPs to seek out constituents, pro-actively. I get a lot more correspondence than many MPs, because east Bristol - or parts of it - is a very politically engaged, politically aware place. The volume of letters will drop dramatically when it loses Easton and that little bit of Knowle where Glenn lives! However, it's still only a small percentage of people who contact me. So, for example, I did a pretty big mailing to constituents about immigration, including a factsheet on what policies are and some myth-busting, and a survey. Did I do this so that people thought 'Isn't she a busy, hard-working MP who cares about what we think?' or did I do it because I'm quite seriously worried about the potential for the BNP to gain a foothold in parts of east Bristol, and concerned about the possible impact on community cohesion of the changing demographics of east Bristol, and I want to engage with people who might otherwise feel very angry and alienated?

Actually this discussion has made me wonder whether it would be a permissible use of the Comms Allowance to send every household in east Bristol a breakdown of my expenses claims since I became an MP and an explanation of the new rules (although that's a moveable feast at the moment). Would that be an exercise in self-justification, or an exercise in transparency and accountability?

Hopi, good point about interest only mortgages, hadn't thought of that.

Glenn, I've told you before about using my blog as a party election broadcast for the Green Party! I understand why you're suggesting what you're suggesting, but I think it would be hugely open to abuse, as Clinton's impeachment demonstrated. But if you are elected, which I suspect is a rather big if, then how about testing it out on a pilot scheme?

Pointer2null said...

I gather you claimed £21,266 for the second home allowence for 07-08. Any 50" plasma TV's or moat clearance you'd wish to declare before the full details are released?

Kerry said...

The TV was either a 17" or a 19" and then when I got burgled for the first time it was replaced by the insurers - at no cost to the public purse - with one 2" bigger because they didn't make the previous model anymore. The burglars didn't take it the second time, for some reason known only to themselves. I can measure it if you're really bothered, or have a picture of me taken next to it holding that day's Guardian so you can do a size comparison.

I'm afraid I don't have a moat either, or a garden but I do have a bit out the back where the bins go. As yet I have not felt the need to dip into taxpayers funds to adorn this.

Glenn Vowles said...

"Glenn, I've told you before about using my blog as a party election broadcast for the Green Party!" (K)

Ok, its self and party promotion of course (albeit only to blog readers) but I was making a perfectly serious and important point - its quite possible to devise a set of rules to fairly govern a system which enables elected people to be recalled. I guess you've allowed the 'ad' from me because you recognise the importance of the issue, for which I'm grateful.

"I understand why you're suggesting what you're suggesting, but I think it would be hugely open to abuse, as Clinton's impeachment demonstrated." (K)

Not a good example, for me. If the process is governed by the right set of rules whats the problem? Is this resistance from an elected rep to the empowerment of her constituents?? What are constituents to do if their MP refuses to resign despite some very obvious wrongdoing, under the current system??

"But if you are elected, which I suspect is a rather big if, then how about testing it out on a pilot scheme?" (K)

The Bristol Evening Post this Saturday described Eastville as a 'Liberal stronghold' and the LD vote has been around about 50% for a while now. The Post forecast an LD win, not surprisingly.

However, the future does not have to follow the past and votes have yet to be cast!! I'm very happy to give a guarantee to Eastville's voters that if I'm elected I would resign if it was shown that large numbers of my constituents felt I had breached Nolan's Seven Principles of Public Life for instance. Many MPs have breached these - they should resign!!

Matt Wardman said...

I do admire you for keeping talking through the detail. It's what we need and will be shown to be good foundation laying for the eventual reforms.

I agree with all your remarks abour "Process" - it is clarity and openness of process that is the foundation of the reputation of Parliament. That used to reside more in the person of the Speaker and in "character" and "traditional virtues", but - not blaming any party - that does not hack it in the 21st Century, unfortunately.

I'll stay out of real detail for now but I do like this idea:

>>Actually this discussion has made me wonder whether it would be a permissible use of the Comms Allowance to send every household in east Bristol a breakdown of my expenses claims since I became an MP and an explanation of the new rules (although that's a moveable feast at the moment).

Although it could be construed as party political in the local context - which is why I'd just abolish the comms allowance outright, unless it became a mandatory part of a standard annual report for all MPs.

>Would that be an exercise in self-justification, or an exercise in transparency and accountability?

I think that once the roar of the dam breaking quietens down and people start working through the detail, it will become fairly clear what has been used reasonably.

Still some way to go though. There'll be a reaction when people notice that the class of '97 who lose will get (I think - unless I missed something it is roughly one month's salary for each year of service in Westminster up to somewhere between 6-12 months) payoffs of £40k+ lump sums under the resettlement grant, with the first £30k being tax-free.

I also predict rapid reform of the pension scheme to cap the Exchequer contribution at 20% of salary, and put up MP contributions to the new higher levels. That is a proposal ready to roll and already on the agenda, and involves no really major immediate cutbacks - it is rather removing benefits in future years.

Pointer2null said...

"The TV was either a 17" or a 19" and ... have a picture of ... I'm afraid I don't have a moat either ..."

You didn't seem that pleased with my question or references to excessive claims.

You called this blog entry 'Shellshock'; did you really thing that we the tax payer would be smiling away saying that's ok if John Lewis sells it for that go for it, and while you're at it, that TV looks a bit old"???

I've picked out your expenses since you're my MP. What particularly annoys me is I cannot see how it costs £21,266 (or if you had to earn this £28,200 before tax) to run a home you only spend part of the time in. I don't even earn that much and I manage to rent a home (cost more than a mortgage), pay for all my transport (see my comment on public transport), pay my council tax etc etc.

From the look of all the expenses yours were not excessive as some were, but they still seem to be much more than the 'absolutely necessary' as stated in the rules (which MP's wrote themselves).

Why don't you publish all your expenses - not by post as someone suggested (as we'd have to pay the postage), but online - much better value for the tax payer I'd say.

Kerry said...

Why should I have been pleased with your question?

All I can say is that it's a very modest flat, in a not particularly salubrious area, about a mile away from Parliament so I can walk to work. And that figure includes things like council tax and other living costs too. That's what living in central London costs, unless you're in social housing or sharing with a bunch of other people. (Which incidentally is why the child poverty issue in London is so hard to crack). In my first year in Parliament it included the cost of furnishing the flat - which I accept many people do not think is a valid entitlement, and claims for food, which I was always uncomfortable with, but I've posted previously about that.

I entirely accept that people don't think we should have received all this by way of allowances, and we have now already moved to a system where much less will be allowed. You're entitled to criticise me on the basis of what I have claimed - but not on the basis of spurious slurs about 50" plasma TVs or moats. As I've previously said, I didn't even know we were entitled to reimbursement when I first furnished the flat, so I certainly didn't go into it with the view - oh, the taxpayer's picking up the tab therefore I can splash out a bit.

As for publishing my expenses - I fully intend to do so. There are technical issues, as we've not been given them in easily publishable form. As I have explained on here, I've spent much of the past week at someone's bedside in hospital after they suffered a near fatal heart attack. You obviously think my time would have been better spent wading through expenses forms in the office. I don't.

Pointer2null said...

"spurious slurs about 50" plasma TVs or moats"

I never said you had a 50" plasma and since I know you have a flat in London, I would be most surprised with any claims for moat clearance.

"As for publishing my expenses - I fully intend to do so... There are technical issues..."

I have no problem with that at all - technical issues are part of life.

"I've spent much of the past week at someone's bedside in hospital after they suffered a near fatal heart attack. You obviously think my time would have been better spent wading through expenses forms in the office. I don't."

Your time is yours to use as you see fit. Spending time with someone in hospital would incur the wrath of no one, especially me. Don't assume I read all your blog entries or know all about the health of your friends and family. I'm commenting on the political issues. If they are interrupted by private life issues then I'm sure the receipts can wait - an ill friend is obviously more important than a list of expenses.

It is not a question of when you publish (within reason) but if you publish.

WD Blue said...

new to the blog so apologies for commenting on such an old post - refreshing to see stright talking on this issue though... the only benefactors from all this mess are the extremist parties like ukip and the bnp. the current level of public cynicism towards mp's is frightening... its a pity most conversations on expenses haven't gone like the one above